🤔 Do Credit Cards Impact Your Borrowing Power?
It’s a common question for many Mackay buyers:
“Will my credit card affect my chances of getting a home loan?”
The short answer is — yes, it can.
But not always in the way you might think.
💳 It’s Not the Balance — It’s the Limit
One of the biggest misconceptions is that lenders only care about how much you owe on your credit card.
In reality, lenders assess your credit limit, not just your current balance.
Example:
The lender may still assess it as if you could use the full $10,000.
📉 How It Affects Borrowing Power
Lenders apply a minimum repayment assumption (often around 3% of the limit).
So in the example above:
This reduces how much you can borrow — even if you don’t carry a balance.
⚠️ Multiple Cards Add Up Quickly
Having multiple credit cards can significantly impact your borrowing power.
Even unused cards with high limits can work against you.
✔️ Should You Close Your Credit Card?
Not always — but it’s something worth considering.
Some options include:
✔️ Reducing your credit limit
✔️ Closing unused cards
✔️ Keeping one low-limit card if needed
The right approach depends on your situation.
🧠 What Lenders Also Look At
Beyond limits, lenders consider:
Good repayment behaviour can still work in your favour.
📍 Why This Matters for Mackay Buyers
In Mackay’s market, small changes to your financial position can make a difference.
Reducing credit limits or simplifying your finances could:
✔️ Increase your borrowing capacity
✔️ Improve your application strength
✔️ Help you secure a better loan
🚩 Common Mistakes to Avoid
❌ Applying for new credit before a home loan
❌ Keeping high limits “just in case”
❌ Assuming unused cards don’t matter
❌ Closing cards too late in the process
🤝 The Bottom Line
Credit cards aren’t necessarily a problem — but how they’re structured can impact your borrowing power.
Understanding this early can put you in a much stronger position when applying for a home loan.
If you’re unsure how your credit cards might affect your borrowing capacity, we can help you review your situation and guide you through the best next steps.
📱 (07) 4953 2799
💻
www.gardian.com.au📍 73 Wood St, Mackay
